Break-Even Calculator
Enter your fixed costs, variable cost per unit, and selling price to find your break-even point, contribution margin, and profit at any sales volume.
Rent, salaries, insurance, equipment
Materials, shipping, commission per unit
Used to calculate margin of safety
Break-Even Examples by Industry
Real-world break-even scenarios across common business types.
| Business Type | Fixed Costs | Variable Cost | Selling Price | Break-Even | CM Ratio |
|---|---|---|---|---|---|
| Coffee Shop | $8,000/mo | $1.20 | $4.50 | 2,425 cups/mo | 73% |
| SaaS Product | $15,000/mo | $5.00 | $49.00 | 341 subs/mo | 90% |
| E-commerce | $3,000/mo | $18.00 | $45.00 | 112 orders/mo | 60% |
| Freelance Agency | $6,000/mo | $20.00 | $120.00 | 60 hrs/mo | 83% |
| Restaurant | $25,000/mo | $8.00 | $22.00 | 1,786 covers/mo | 64% |
Illustrative examples. Actual costs vary significantly by location, scale, and business model.
Break-Even Formulas Reference
Contribution Margin
Selling Price − Variable Cost
Example: $50 − $30 = $20
CM Ratio
Contribution Margin ÷ Selling Price
Example: $20 ÷ $50 = 40%
Break-Even Units
Fixed Costs ÷ Contribution Margin
Example: $10,000 ÷ $20 = 500 units
Break-Even Revenue
Fixed Costs ÷ CM Ratio
Example: $10,000 ÷ 40% = $25,000
Margin of Safety
Projected Sales − Break-Even Sales
Example: 800 − 500 = 300 units (37.5%)
Target Profit Units
(Fixed Costs + Target Profit) ÷ CM
Example: ($10K + $5K) ÷ $20 = 750 units
How to Lower Your Break-Even Point
| Strategy | How It Helps | BEP Impact |
|---|---|---|
| Raise selling price 10% | Increases contribution margin per unit | −18 to −25% |
| Cut variable cost 10% | Increases contribution margin per unit | −12 to −15% |
| Cut fixed costs 10% | Directly reduces required CM to cover | −10% |
| Switch fixed → variable | Lowers fixed base (e.g., commission vs salary) | Variable |
| Increase product mix CM | Sell more high-margin items | Depends on mix |
Impact on BEP assumes all other variables held constant. Raising price has the highest leverage because it simultaneously increases revenue and contribution margin.
Interpreting Your Break-Even Results
Selling fewer units than needed to cover costs. Every unit sold reduces losses but does not generate profit. Reduce fixed costs, raise price, or cut variable costs.
MOS below 20%. Sales are close to covering costs. A small drop in volume triggers losses. Build buffer through cost control or pricing strategy.
Generating profit on every unit sold beyond break-even. Each additional unit earns exactly the contribution margin. Focus on scaling volume.
How to Calculate Break-Even Point — Step by Step
Break-even analysis answers: "How many units do I need to sell before I start making money?" Three inputs — fixed costs, variable cost per unit, and selling price — give you the answer.
- 1Identify fixed costs. These don't change with volume: rent, salaries, insurance, software subscriptions, depreciation. Example: $8,000/month total fixed costs.
- 2Calculate contribution margin per unit. Contribution Margin = Selling Price − Variable Cost per Unit. Example: $50 price − $20 variable cost = $30 contribution margin.
- 3Divide fixed costs by contribution margin. Break-Even Units = Fixed Costs ÷ Contribution Margin = $8,000 ÷ $30 = 267 units/month.
- 4Convert to revenue. Break-Even Revenue = Break-Even Units × Price = 267 × $50 = $13,333/month. Any revenue above this is profit.
- 5Calculate margin of safety. If you currently sell 400 units: Margin of Safety = (400 − 267) / 400 = 33%. This is your buffer before you start losing money.
Break-Even Examples by Business Type
| Business | Fixed Costs/Mo | Price | Variable Cost | Break-Even Units |
|---|---|---|---|---|
| Coffee shop | $6,000 | $5.00 | $1.50 | 1,714 cups |
| SaaS product | $12,000 | $49/mo | $2 | 253 subscribers |
| E-commerce (physical) | $3,000 | $35 | $18 | 177 orders |
| Restaurant | $15,000 | $18 avg check | $7 | 1,364 meals |
| Freelance consultant | $2,000 | $150/hr | $10 | 18 hours |
How Pricing Affects Break-Even — $8,000 Fixed Costs, $20 Variable Cost
| Selling Price | Contribution Margin | Break-Even Units | Break-Even Revenue |
|---|---|---|---|
| $30 | $10 | 800 | $24,000 |
| $40 | $20 | 400 | $16,000 |
| $50 | $30 | 267 | $13,333 |
| $60 | $40 | 200 | $12,000 |
| $80 | $60 | 133 | $10,667 |